Machinery/Industrial Goods

GE 'back on offense' as economy, finances improve

SAN FRANCISCO (MarketWatch) -- General Electric Co. Chairman and CEO Jeff Immelt said Tuesday that the industrial conglomerate is "back on offense" amid a "gradual" economic recovery and a healing financial division.

"We have positioned the company for solid earnings and cash flow growth in the future," Immelt told analysts in New York. "When we look at the near term, it's going to take investment, organic investment, to drive growth."

Immelt said he expects to see flat earnings in its industrial, capital finance and corporate divisions next year, while the media side is heading for a decline.

GE
GE, +0.79%
recently laid out plans to unload its NBC division to Comcast, adding to a cash pile that Immelt expects to grow to $26 billion by the end of 2010.

Shedding NBC was one of several steps Immelt has taken to refocus the Dow Jones Industrial company's efforts on its core industrial businesses, a task made all the more difficult by the recession's impact on equipment orders.

"We plan to generate a lot of cash and to be very thoughtful about how we allocate that capital," he said.

Looking ahead to 2012, Immelt said he sees GE's profit coming in "a lot higher" than the 99 cents Wall Street analysts are currently targeting for 2009.

As for GE's financial services division, Immelt is looking for big improvements within that time frame. "We would be extremely disappointed in our GE Capital business if we didn't see reasonably robust earnings growth as we walk through this," he said.

Immelt also said he is looking for GE Capital to restore the dividend it pays to its corporate parent "in the next few years."

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